hello. welcome to "street signs." i'm nancy hungerford in london and trumped again. european stocks are firmly in the red, taking their cue from asia and the u.s. with oil majors the biggest underperformers one hour into trade. >> and italy in limbo. the formation of a new government hangs in the balance as italian president sergio

mattarella delays his approval of giuseppe conte as prime minister profits at marks & spencer falls for a second straight year but shares rally as the margin outlook is more positive than expected and it maintains its dif dent. barclays says it has no plans to tie up with another bank but it may be exploring a deal with competitors sending standard charter shares higher hello. welcome to "street signs." we want to bring you the european pmi data breaking as we speak. for the eurozone may flash composite, 54.1 on the month that compares to a 55 reading that was expected in a reuters poll it's lower than the reading in april at 55.1.

expectations were for it to weaken slightly from april but there would be a bigger miss than expected. overall the flash composite pmi for the eurozone is sitting at an 18 month low. this comes after disappointing pmi figures from germany and france on the service sector in particular it's already been weighing on the markets look at the euro levels here, 117.04 we saw some buying of german bunds as well. the services pmi is at 53. 9 that was shy of a forecast for 54.6 and a softening from 54.7 in april when it comes to services, that's at a 16-month low the output index was at 55.5, weaker than 56.2 in april,

standing at an 1818--point low. you get the picture here, more worrying signs about the pmi data at a time when people were worrying whether there was a soft patch due to seasonal factors at stake, but today we are seeing further softening, weaker expectations on the overall eurozone figure for germany as well and services for france i can say i don't necessarily envy mario draghi at the ecb we know he wants to get forward moving along on normalization, but you have the weaker pmi figures at the same time we have this uncertainty in italy. >> i think it's important to take a step back and analyze the numbers. the month of may was replete for a number of holidays for the

eurozone countries, number one number two, the figures are coming off a high base from 2017 that being said, you cannot take away from the fact this has been a consistent theme i know you and i have been talking about this ever since this trade war narrative started to unfold and take root in the market psychology, we have seen some forward looking indicators within the pmi data set start to lose momentum. that really spells uncertainty that reflects uncertainty, undercutting confidence and activity i don't think that narrative has gone away. i think you are still seeing the lingering effects of all of that to show up still in the pmis ag cycle. >> and aggravating investor jitters here let's look at the moves in

european markets this following a down trend in the u.s. reversal from what we saw in europe with stocks moving to the upside concerns over a shift yet again in the trump administration's views on trade we thought it was kumbaya moment with china, it doesn't look like that yet when you look at donald trump's comments overnight, and some concerns about the upcoming trump/kim meeting. a lot of focus on energy and the oil and gas sector here. this has been a drag on the session so far i know that was astory you tracked in asia. oil prices have dipped on reports that opec could boost production amid concerns around iran oil and gas up 2.5%. worth noting that autos are on the back foot after leading yesterday. the sector is off 1.3% there was some optimism around the fact that china was looking to further open its markets there. many said this may not be such a

big deal as you may think given they have taken other steps on the joint venture front. >> let's pivot back to the u.s. story, the policy risk coming out of the trump administration. trump's comments overnight roiling markets today. let's bring in chery kang. you have been watching this to and fro from the trump administration over whether this very important and historic dial loss when trump and kim jong-un happens on june 12th in singapore. there's no shortage of indecision coming out from the u.s. administration. can you shed some light on what you think will happen? >> i think i'm going to have to give more weight to a school of thought out there, this camp that still thinks the summit is likely to happen on june 12th. we're just looking at a part of the pre-negotiations or this

diplomatic dance, as somebody called it, between trump and kim jong-un at this point. yes, we did see trump coming out with the strongest expression of doubt, but that can also be part of this negotiation. that's according to many north korean experts i need to get out this latest coming out of china, because remember what we saw overnight, president trump's suggestion of china's influence as president xi jinping influencing kim jong-un to come out a little tougher ahead of that proposed summit we have beijing's foreign ministry saying that our role has been positive in all this on the korean peninsula issues, we hope that the summit actually goes ahead as scheduled. a little bit of rejection of this idea of china influencing north korea so that it's making

it difficult for the summit between trump and north korean leader kim jong-un i have to point out how south korea is playing in all this it's trying so hard to make this happen and go ahead. we had this summit between south korea's leader in washington, sitting down with president trump in the oval office and what south korea's president, moon jae-in said was not to waste this opportunity because we brought north korea so close to that negotiating table. and he added there's no need to question kim jong-un's willingness to sit down for summit talks looking at all these different parts, that gives a little bit of support to this consensus that we have at this point, that the summit will likely happen. in the meantime, we've got some moving parts, interesting moving

parts i have to point out in north korea. reports suggest that -- namely cnn reports that south korean journalists, eight of them have arrived in north korea they're joining this international press corps there. about two reporters, journalists and photographers in north korea. they have been invited by north korean authorities there the moving part moving forward is will north korea show the display, the dismantlement of one of its nuclear testing sites. so something that north korea can show visually that it is willing to denuclearize. back to you. >> i like the way you phrased it diplomatic dance pre-summit singapore is on. if it's off, we'll try to figure that out and get a handle on it.

>> u.s. futures are implying a weaker session over in the u.s. for the major indices. remember that we do have fed minutes. so the markets will want to know more clarity on the inflation overshoot that the fed seems to be tolerating and their view on yields and the yield curve broadly. let's get back to the asian equities market. south and southeast asia trading at this time it's ban choppy session, overall there is a fair degree of risk aversion related to the trade war narrative may be back on again. remember the tariffs have been suspended but they are not completely being rescinded that's the message from steve mnuchin. i do want to highlight the losses on the malaysian index. this is post-election. perhaps this is the market realizing that the gs it will be going as of june 1st

there will be concerned over revenue generation and offsetting measures, and whether there is a plan "b" from the new administration there are clear implications here for the fiscal deficit and the ratings agencies have said so the markets just closing in japan, hong sokong and south korea. a fairly rough day chinese markets under pressure hang seng down by 1.8% let's bring in the head of asia equity and portfolio manager at ostrom asset management asia joining me for the entire hour. good to see you. >> good to be here >> let's start off with this stretch we've been seeing in emerging markets and in asia it's different this time around, isn't it this is not taper tantrum 2.0. balance of payments, fx reserves position is better, it's improved selectively do you buy these

dips >> i think the region is on a growth mode, but naturally what you have in the current development is rising rates trend, a strengthening u.s. dollar that concoction creates a volatility for emerging markets, especially asia. so you will get funds flow that's been happening in the last month given the kind of strength you have seen last year, just as you mentioned, the high base effect is making some really good performances good numbers you're seeing, not just macro, still looking pale, though, because year-on-year is less stronger. so you have reason for people to sell yes. the rising rates, dollars always >> and it's a tricky overlay on that because india and indonesia seem most exposed to the higher rates environment and the outflow risk et cetera, yet those are the two markets that

have strong domestic demand stories going for them on balance how do you approach them with these cross currents >> i think you have to choose your camp. we're in a longer term camp. we have not seen excesses, bubbles in the prior two years we've only seen the start of recovery last year as you can see, a lot of pmis, they are down year on year, month on month, but they are above 50 people want to take profit there's a camp that wants to take profit. there are reasons with rising u.s. dollar that there will be funds flow but issues like debt, all that, the economy is growing much more when you look at those ratios, i know the camp talks about the debt levels, they're pretty controllable today >> nancy

>> sri mentioned those countries most exposed to the higher rate environment, arguably those countries also exposed to the higher oil price environment yes, prices are giving back today on the session, overall how high does oil have to go before you start worrying about it being a head wind in asia, given how much oil asia imports and how important that is for industrial demand as well. >> i think opec is already starting to worry. that sets an automatic mechanism going on if it goes on from here it will start to ratchet up a bit on the cost side definitely the key thing now is a lot of these economiesare waiting for oil prices to reach a certain level where capex will kick off.

i know a lot of capex pending, these projects are on the final stage of the bidding process and shale output will react. 80 is good that kick starts everything. we need oil and gas to get on its feet again that's happening now i'm in the glass half full perspective. it's pretty good >> i think there are implications for demand destruction at this point in the oil price. t we have to leave it there, sir thank you very much. >> yes >> coming up later in the show, mark zuckerberg apologized to european lawmakers but took some flack for dodging questions. we'll talk about his appearance in brussels and look ahead to his meeting with the french

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welcome back to "street signs. let's look at the u.s. treasury curve. a lot of investors keeping an eye on the market with fed minutes in focus later today the ten-year at 3.0210 just above that 3-point level. let's bring in gershen from alliance bernstein thank you for your time. what will you be watching out for when it comes to the fed minutes as it relates to the u.s. treasury positioning here >> believe it or not, i'll be paying attention, but i won't put as much significance as i normally would i think the fed has been clear on what they want to do. they're not going to let short-term spikes, whether it's talk of a trade war, maybe what's happening in italy or anything like that derail them they will hike another three, four times this year and re-evaluate. conditions warrant it. we're at full employment in the

u.s. inflation is creeping up we're still below what most economists consider a normal rate so people will parse every little word, but at the end of the day the fed will keep on course >> you mentioned they may not be paying attention to trade tensions, certainly investors are, if you look at equity markets overnight, additional noise from the trump administration that is likely to have an impact on rates and the fx markets, given that there's lingering uncertainty. >> yeah. i think you're right i think investors are in a difficult position today on one hand rates are too low. not only in the u.s. but particularly in most of europe, germany, et cetera on the other hand people are scared about going into risk assets, be it equities, a high yield given talks of a trade war, the italian situation, given some volatility in parts

of em including argentina. i think one thing we should expect is continued volatility in all these markets >> good morning. do you happen po sto subscribe the whole coiled spring theory that price pressure also have to hit at some point in the cycle and the fed will have to pivot aggressively on policy >> you know, i think there's so many different factors, it's hard to point to one i think we're seeing inflation be an issue. it will continue to become an issue. we put inflation in this one category, there's three types of inflation, there's the goods inflation, which is really nowhere to be found. you could argue it's deflationary you have service inflation, which is the bulk of the u.s. economy, and we're seeing signs of inflation there and asset price inflation, which while muted in the shorter run,

we know what asset prices have done over the last few years putting that together, there's going to be pressure we focus on changes, what will the fed do with the next move. when you look at the facts, didn't know what was happening in the past ten years, you looked at full employment, where growth is coming in now and inflationary pressures, you would be like we probably should be above the normal rate normal is 3. fed funds is at 4. that doesn't make sense. that's why the fed will ignore a lot of this noise and continue along their path >> do you have a number for the high water mark on the ten-year yield. in asia it seems to be slap bang in the middle of the negative feedback loop that creates outflows, capital outflows is it around 3.25, 3.5%? does that sound right? >> that's where a lot of

technologists are saying there's resistance at. i've been hearing people -- early in my career people were telling me it's impossible for the ten-year to trade below 3%. it went below 2% if you told me the ten-year was going to be closer to 5% in two, three years, it wouldn't shock me what investors should take comfort in is that, yes, even though the value of the bond portfolio goes down when yields go up, that means future returns will be more positive. you can reinvest your coupons, bonds that get matured at the higher rates which lead to higher, longer term rates over tim time >> thank you very much for joining us today we appreciate your time.

let's just stay with fixed income and the currency markets and look at the dollar crosses as we were saying, focus is on u.s. dollar ahead of the minutes from the fed's last meeting as investors wait for clues on what the u.s. central bank is likely do next month. dollar surging against the japanese yen this is where we are standing now, 109.91. i do want to highlight the euro. the common currency is under fed pressure against the u.s. dollar, 1.1717 so off about 50 basis points for the single european currency that's after those pmis pretty much underwhelmed market expectations, both germany, france and the composite number from the eurozone as a whole so there are questions there as we were discussing on whether this is really just coming off a high base, some moderation from last year, whether it is

seasonal noise or whether this really is uncertainty related to trade tensions, et cetera, and this being as good as we get in terms of growth. >> as if investors need additional uncertainty, there's that big wildcard coming out of italy. president sergio mattarella still has not approved the five-star movement and lega's choice for prime minister, giuseppe conte the coalition's pick for economy minister is also raising red flags, he's a staunch euro skeptic and has a book describing italy's entry into the eurozone as an error let's get straight out to willem who has been following all of the ins and outs here. willem >> thanks. we heard on monday night this name being formalized as a potential appointee as prime minister, giuseppe conte from

five-star and lega they spent two weeks hashing out a complex set of proposals for government once this man is given the job f he's gi, if he'h job, it will be up then to sergio mattarella to approve the candidate and then go through parliament there's a lot of ifs we've seen a couple days of waiting to see if this man will be approved. there's been questions swirling around his educational background stay with us on cnbc

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>> and italy in limbo. the formation of a new government hangs in the balance as italian president sergio mattarella delays his approval of giuseppe conte as prime minister profits at marks & spencer falls for a second straight year but shares rally as the margin outlook is more positive than expected and it maintains its dividend welcome back to "street signs. a busy day for data across the region today we're getting uk april cpi numbers. let's break those down we're getting uk april cpi up about 0.4% on a monthly basis. on a yearly basis, up 2.4% that is slightly shy of a reuters forecast looking for an annual increase of 2.5%. worth noting that's the lowest since march of 2017.

for that core cpi number, when you strip out energy, food, alcohol, tobacco, it was up about 2.1% on a yearly basis, that's shy of a forecast for 2.2% that's the lowest since march 2017 looking at some other breakdowns here, looking at the core producer output prices, those were up on the monthly basis, 0.1% overall on the year, higher by 2.4%, shy of the forecast for an increase of 2.1% we're looking at sterling here it's falling after the uk inflation data has come in shy of expectations. this follows the bank of england report that didn't sound too upbeat we heard from governor mark carney yesterday saying many of the factors keeping growth muted, he expected them to pass some of those seasonal factors yes, the data picture today is

inflation, a bit softer than expected keep in mind when you talk about the annual rates of 2.4%, that would be above the bank of england's target of 2% >> i think it's important to recognize that energy contributed to the number and weaker sterling, i'm sure, contributed to the number as well and i think from a policy point of view, bank of england will probably look through this particular figure and look through the seasonal effects, the volatility associated with the oil market, too. that probably is one reason why we're seeing retracement in the british pound. cable now at a five-month low, 133.49 going forward, higher oil prices, you can say this for global central banks, it is going to present something of a headache for them if this move higher is prolonged. if we stay above $80 a barrel in

a higher price environment for longer yes, there will be some impact on headline, then there will be an inflationary impulse at the core at some point that you would imagine. the central banks will have to recognize and take that into account in their policy methodology. i think it complicates an already complicated job when you come to looking at price pressures for the central banks of the world, especially the fed. >> it certainly does it's not just the bank of england, central banks around the world trying to gauge what will happen with the oil price environment. history has shown that often central banks including the fed looked past the oil price factor because as we were talking about earlier there's a feedback loop aspect here where sometimes it becomes headwind on further growth uk gilt features extended gains by 15 ticks after that weaker

than expected uk inflation picture. >> the wrong type of inflation let's leave that conversation for now and get back to technology the knives were out. european lawmakers failed to land a blow on facebook boss mark zuckerberg as he testified in brussels, answering questions in the wake of revolutions that users personal data was compromised. he apologized again but also riled those delivering the questions. >> would you allow users to escape targeted advertising? i asked you six yes or no questions, i got not one single answer you asked for this format for a reason >> i'll make sure we follow up and get you answers. >> karen tso is live in paris where mark zuckerberg will meet

with president emanuel macron later today. it is not just the inquisition by the mps he has to face, you have potentially this big regulatory backlash in the form of a digital tax law coming through in a matter of days. >> the playing field is changing in europe, sri you spoke about the missed opportunity from european lawmakers. emanuel macron, the french president, will not miss his mark today he has a lunch set up where he will tackle some big issues with mark zuckerberg along with about 40 plus technology leaders last night there were many concerns around data privacy after what happened with cambridge analytica harvesting the information of facebook users. mark zuckerberg was forced to weigh in on how facebook is tackling data privacy. listen to what he said about

changes coming to europe later this week. >> i don't think the question is whether there should be regulation, the question is what should be the right regulation the internet is important in peoples lives. some sort of regulation is important and inevitable the important thing is to get this right and make sure that we have regulatory frameworks that help protect people, that are flexible, so that they allow for innovation, that don't inadvertently prevent new technologies like ai from being able to develop. >> zuckerberg expects facebook to be compliant with the new european data protection rules when they come into force on friday just in case he's taken other measures about 1.5 billion users were moved out of this jurisdiction just in case there are fines that tally up to about 20 billion euros or 4% of global turnover, but also rules, too, on tackling hate speech if you're close to the

borderline, facebook might remove some content any way, which raised the hackles of many lawmakers, including nigel farage the other point i wanted to raise was the idea of a monopoly facebook has in social media there's some form in europe about antitrust cases, that's witnessed around the google case this came up over and over again in the hearing last night with mark zuckerberg questioned about the facebook monopoly. take a listen. >> from where i say the, it feels like there are new competitors coming up every day. there are competitors that reach tens, hundreds of millions of people and we're constantly needing to evolve our service to stay relevant and serve people well that feels like a competitive environment where there are many choices people have. >> that did not appease one of the men in charge of brexit negotiations in europe, so a man who knows something about splitting up complex areas of

business or countries. he was not confident about the answers he received around the facebook monopoly and suggested that there might be moves to try and divide up the facebook platform whatsapp, instagram, messenger, facebook itself. so investors take note that could be a risk for facebook the other point i want to make is around reaction, negative reaction from one of the lawmakers. a german lawmaker, chief amongst those leading the changes for european data protection this is what he had to say after the hearing last night >> i think we need to regulate more on market power of facebook for example, splitting off facebook from whatsapp or facebook messenger is an option after tonight, that was one of the questions where mark zuckerberg had no real answer. >> so privacy and monopoly issues coming up lots of fines attached to both today mark zuckerberg will be

joined by about 40 plus other leaders including another scandal-clad tech company from the states, uber dara khosrowshahi will be turning up here and more mature american companies, ibm, microsoft, the leaders of those cou companies will be here and emanuel macron has been seeking more revenue from these companies that he feels have not been paying enough tax he is seeking greater investment also as he tries to create a start-up culture in paris. he's gone after artificial intelligence, so he wants something from those american tech executives. i believe he'll get it over lunch. back to you in the studio. >> wewill await that meeting thank you very much for joining us coming up, marks & spencer posting its second annual loss in a row, but the stock is climbing we'll tell you why after this break.

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welcome back let's give you a look at marks & spencer. shares are trading towards the

top of the stoxx 600 today despite reporting its second straight year of declines. but investors were cheered by a more optimistic margin outlook as well as the fact that the retailer has maintained its dividend shares higher by 4 % let's look at julius baer, assets under management hit 401 billion swiss francs the swiss bank said market performance was essentially flat adjusted cost income ratio was below 67% in the middle of the bank's medium term target range. at barclays, barclays reportedly says it has no plans to tie up with a rival bank. however it has declined directly to comment to cnbc on a report that it is exploring a deal with competitors like standard chartered. private conversations between directors have taken place about the benefits of a merger

according to "the financial times. no official approach has been made this as barclays infaces increasing pressure from an activist investor. let's get out to joumanna bercetche at the iif spring meeting in brussels, where policymakers and banking executives have been gathering joumanna g to see you. >> lots of banking news, happy to say joining me now is the chairman of bbca, francisco gonzalez i will ask him about a lot of the challenges in the banking sector and opportunity i want to talk about european growth specifically, of course we've seen a bit of a patch of weakness, but spain is one of the out-performers this year how has that manifested itself in terms of opportunities and outlook on the ground for bbva frnlg>> spain has evolved from

crisis, growing at 3% plus it's the biggest growth in europe, so it's been okay. the financial system is far more robust, we had a severe banking crisis back in the day, but now everything is okay when you look at the banking system in spain and everywhere, you have to look at what will happen over the next five, ten years in the banking system. you have to take into account the digital disruption >> we'll get into that in a second i want to ask you whether the catalonia developments have had an impact on sentiment and whether you have seen a hit in that particular part of spain. >> catalonia there is a lot of fuss

they have conveyed a misleading message, frankly they don't have such a majority at all the government was obliged to intervene, essentially because they broke the law after that decision, you know, the real thing is spain is very strong democracy the rule of law prevailed, and catalonia is very normal everything is okay, except these guys who are shouting every day. >> you talked a lot about the financial system in spain and that it has undergone a lot of work over the last couple of years. a lot of deleveraging has taken place. do you think we've reached the end of the deleveraging practice >> i think now we are seeing a pick up in the growth in the economy. probably this year will be the first year where the stock of the balance sheets and banking systems will be up

the situation is quite reasonable you have to look at europe and the world. in spain it is well. >> i want to ask about bbva. when i look at the valuation, it's trading at a bit of a discount versus peers because of the emerging market exposure you have you have exposure in mexico and turkey starting with mexico, how has the constant chat about the nafta renegotiation affected your business there? >> there are two things in mexico one is nafta the other is elections in july that's created a lot of, i would say, uncertainty over mexico even with those conditions, mexico is growing at a rate and over time mexico will grow at a rate of 3% plus. so we have to wait for nafta and elections, but whatever happens,

mexico has more than 100 million people, and an incredible demographic dividend we have the strongest bank in mexico and we're confident about mexico >> perhaps the moves have been more significant in turkey turkish lira this morning making new lows a lot of pressure on the currency and the central bank to intervene and do something if this continues to unfold. would you have to make business decisions about the future of your business on the ground? >> no. turkey again, i like turkey. 80 million people, young people, they have a couple of turmoils there will be elections 24th of june, i hope and i think after elections, whatever the government is, they will make the right decision to control

the economy. the economy is growing too fast, too much it's a question of taking the right decisions and monetary policies and trying to straighten the situation out i think they'll do it. >> what's the message you would send to investors concerned about bbva's exposure to emerging markets >> this is our business model. we have a diversified bank we have a presence in developed and emerging markets our growth margin has been up, up, up over time irrespective of the major market economies our market is very, very robust. >> you mentioned digital disruption and how that's going to disrupt the whole financial industry over the next five, ten years. i was reading eventually that bbva issued a loan using blockchain technology, blockchain ledger. can you tell me more about that.

>> blockchain is one part of the big revolution, the big digital disruption you have the so-called exponential technologies from the cloud, which may be viewed as the trigger up to blockchain, including ai, which is probably the most important so we have been working in what we call the journey for ten years now. now we have seen an incredible fact the facts are that 50% of our clientele is working in digital. and growing at a rate between 30% and 40% year over year those customers are happier, revenues are up between 10% and 50% depending on customers, cost is one-third

so the future is immense >> just one financial question for you. banks in europe are under pressure to reduce costs, but there's a tradeoff between reducing costs, investing in technology and blockchain, how are you weighing the two together and how do you think about a return in investment when you invest in technology? >> we have a clear idea which is turn the bank into a house the competitors are not the banks, it's the big techs and startups this is the new league of competitors we're envisioning. we are focused on that, investing every year in order to be more efficient. the numbers are struggling our consideration is 49, which is okay, but the aim is to reduce that consideration over the next two, three years. so i am really very happy about

the future of what we have done. we have suffered a lot, now is the time to reap the benefits. >> thank you very much for that. that was francisco gonzalez, chairman of bbva with that, back to you, sri. >> thank you very much for that. fresh data suggests russia's economy recovered somewhat in april despite u.s. sanctions new numbers frsay retail sales were up 2.4% on year after a 2% increase in march. u.s. sanctions pushed russia's economy into a two-year recession. the latest measures were imposed on several government officials and businessmen in april one individual targeted was andrey kostin. he told geoff cutmore that the sanctions are unfair >> you know,the business with

sanctions, new sanctions against institutions represents less than 2% of our assets. of course it will affect to a certain extent we have to see what will happen with the sanctions, because there's some discussion that they could be lethal for rusal and some other countries. we will see. it doesn't represent a huge problem for us what about you personally? does it now affect the way you're able to run the bank? >> at the moment i have not seen any specific problems. some people say that the reason why i wasn't there because i was giving interviews to leading american television channels like yourself. i think that's unfair. for example, i'm the senior gli

senior government official, which i'm not. i'm chairman of one of the international banks. the activity mentioned included ukraine, syria, undermining american democracy which has nothing to do with this, of course all the banking community around the world knows me as a banker i think respect me also. i've been working for more than 20 years in this capacity. what's happened has happened maybe not enough time passed since the sanctions, only a little bit more than a month to say what effect it will have maybe the american bank's representative will be more restricted in dealing directly with me, but otherwise i think we have business as usual with the rest of the world. >> are you actively lobbying at the moment >> not at the moment not at the moment. i think let the dust fall down i am not sure whether i should

let's wait and see what happens with sanctions we should stop the sanctions we should reverse the process. that's why i don't have revenge. i'm telling my government -- advising my government not to take any tit-for-tat actions i think we should stop this tit-for-tat. that's not good. i can't, of course, see the development in a positive way. one day we believe that american elite or american establishment understands that russia is not an enemy to america at all only with preparation we can provide a better world for our people i hope for this. >> let's bring you another check on european markets before we say good-bye the losses for european equities have been extending here after a global move to the down side you're looking at the ftse 100 off here faring better than most major markets which are off more than

1% we've seen sterling fall after the weaker than expected inflation data that's perhaps capping some losses there weaker than expected eurozone pmi numbers. weaker energy prices in the oil sector weighing on energy firms here >> nancy, before we go, a look at the shape of u.s. futures they are implying a soggy state of affairs for the u.s. markets when they kick off trading there's a number of themes here to be cognizant of, renewed global growth concerns crystalized by some pmis and the shine coming off them in europe, emerging market stressed crystalized by the freefall in the turkish lira and the fomc minutes to digest as well. i'm sri jegarajah, that's it from us.

it's 5:00 a.m. and here is your five at 5:00. president trump rattling global markets after downplaying a potential china trade deal and casting doubt on a north korea summit congress voting to roll back some dodd-frank banking read lags regulations. barkleys may be eyeing a potential merger with standard charter bank. and las vegas casino workers okaying a strike. and lav ha